“Pill Pimp” Market Strategy Targets Women At Every Stage Of Life
Once again, Leslie Botha has been proven to be an accurate soothsayer. In her radio program, on her website and in her seminars, Leslie has pointed out that, Big Pharma is mirroring the successful marketing strategies of the American Cigarette Industry — lure the young with misinformation and the promise of sophistication without personal price.
The “Pill Pimp” behind Fewerperiods.com is Duramed Pharmaceuticals, a subsidiary of Barr Pharmaceuticals, Inc.
On thier “helpful, informational site, Fewerperiods.com, there is the following set of warnings:
“Birth control pills have serious risks, which can be life threatening. They include blood clots, stroke, and heart attack. Smoking increases these risks, especially if you are over 35, so Pill users should not smoke. Common side effects include nausea, vomiting, weight gain, breast tenderness, and difficulty wearing contact lenses.
Some women should not take the Pill, including women who have blood clots, certain cancers, a history of heart attack or stroke, as well as those who could be pregnant. The Pill does not protect against HIV infection and other sexually transmitted diseases (STDs).”
A site visitor would probably only notice the warnings if they are a professional researcher, reading specifically for content, or type stylist trained to look at the type and design layout.
These crucial warnings are in white type on a screened light green background. It is likely that most site visitors would not even notice the warnings based on this type treatment.
When considering taking ANY pharmaceutical suggested by your health care professional, remember the Inconvenient Woman’s mantra:
Doctors are not infallible; Ask Questions; Demand Answers; Verify Answers with an Independent Source; and Make informed Decisions. It’s YOUR Body and Your Life.
The Following Information is directly quoted from the Barr Pharmaceuticals Annual Report.
Barr is a publicly traded company, and their Annual Report a public document. You can look up this type of information on any publicly traded company. Their Annual Report, Investment Prospectus are all available either through online sources, or in hard copy through your local library business research desk. — HSCB
2005 Barr Pharmaceuticals Annual Report
Barr Pharmaceuticals, Inc. is a Delaware holding company whose principal subsidiaries, Barr Laboratories, Inc. and Duramed Pharmaceuticals, Inc., develop, manufacture and market generic and proprietary pharmaceutical products, respectively. The Company’s generic products are marketed under the “Barr” label, and proprietary products are marketed under the “Duramed” label.
For the fiscal year ended June 30, 2006, the Company recorded net earnings of $337 million on revenues of $1.3 billion. Of the $1.3 billion of revenues in fiscal 2006, $839 million were from sales of generic products, $330 million were from sales of proprietary products, and $146 million were attributed to revenues derived from co-promotion alliances, development agreements and other sources.
Barr’s business has two reportable segments: generic pharmaceuticals and proprietary pharmaceuticals. In the generic pharmaceutical segment, the Company currently manufactures and distributes approximately 150 different dosage forms and strengths of approximately 75 different generic pharmaceutical products, including 22 oral contraceptive products, representing the largest category of the generic product portfolio.
In the proprietary pharmaceutical segment, the Company currently manufactures and distributes 19 proprietary pharmaceutical products, largely concentrated in the female healthcare arena. These products include the SEASONIQUE™ (levonorgestrel and ethinyl estradiol) extended-cycle oral contraceptive product, ENJUVIA™ (synthetic conjugated estrogens, B) line of hormone therapy products, Plan B® emergency contraceptive (levonorgestrel) product, the ParaGard® T 380A Intrauterine Copper Contraceptive product, and Mircette® oral contraceptive.
To supplement internal efforts in support of its business strategies, the Company continually evaluates business development opportunities that it believes will strengthen our product portfolio and help grow both our generic and proprietary businesses. The Company regularly evaluates opportunities, particularly in the areas of strategic product acquisitions and/or corporate mergers and acquisitions. It also evaluates partnership arrangements that may involve: new technology platforms on which to expand our barrier to entry generic strategy, women’s healthcare products in late stage development, and products or companies for a new, second proprietary therapeutic category. As Barr continues its growth strategy, the Company expects that business development activities, including product and company acquisitions will continue to increase.
Barr’s proprietary development activities are currently focused on expanding its portfolio of female healthcare products including additional oral contraceptives and treatments for menopause/perimenopause and endometriosis. The Company is also pursuing products in urology, and is developing an oral vaccine product to prevent Adenovirus (Types 4 & 7) infections. The Company continues to identify other proprietary product candidates that further expand its product offerings in these areas and is evaluating additional therapeutic categories.
We are excited about the progress we have made in growing our proprietary business. Less than six years after initiating activities in this area, we have a growing proprietary products business with significant future potential.
We currently have 13 proprietary products on the market, five of which we actively detail to physicians. We have four proprietary product applications pending at the FDA and seven in clinical development, one of which is in Phase III studies. We are committed to consolidating our leadership position in women’s healthcare, as well as pursuing additional therapeutic categories. Our pipeline includes products in female healthcare, including oral contraceptives, hormone therapy and our transvaginal ring technology products; oncology; urology; and anti-infective/anti-viral products.
Our SEASONALE extended-cycle oral contraceptive, which created an entirely new category when launched in October 2003, continues to gain market acceptance. Since launch, nearly 1 million prescriptions have been filled.
We will expand this product franchise following the approval of our SEASONIQUE product and are working with the FDA regarding issues raised in the Approvable letter.
We have also filed a NDA for the SEASONALE Lo (levonorgestrel/ethinyl estradiol tablets 0.1 mg/0.02 mg and ethinyl estradiol tablets) extended-cycle oral contraceptive.
In the area of hormone therapy, we are building a full line of tablet strengths for our EnjuviaTM (Synthetic Conjugated Estrogens, B) product. Enjuvia is a plant-derived, synthetic conjugated estrogen product that contains a blend of the ten estrogenic substances found in the brand Premarin®. This year, the FDA approved our application for the 0.3 mg and 0.45 mg tablets and had previously approved our 0.625 mg and 1.25 mg tablets. We are awaiting the approval of the 0.9 mg tablet strength. Although we were disappointed with the FDA’s Not Approvable letter, which we received in April 2005, for our application for our BijuvaTM (Synthetic Conjugated Estrogens, A) vaginal cream, we continue to work closely with the Agency and we are confident the outstanding issues can be resolved. Bijuva, if approved, is intended as a local treatment for vaginal atrophy.
With the introduction of Enjuvia, Barr will be marketing both synthetic conjugated estrogen products – Cenestin® and Enjuvia. What do you see for the potential for this product franchise, now that we are several years out from the Women’s Health Initiative (WHI) study?
While there has been a reduction in the number of women using estrogen replacement therapy following the publicity surrounding the WHI study, hormone therapy remains a nearly $2 billion a year market.
We believe that hormone therapy is appropriate for addressing issues associated with menopause, and believe that women, in consultation with their physicians, are looking to these products for shorter terms of usage, and looking for a full range of dosages in order to select the lowest appropriate dose. Once Enjuvia is launched, women will have two synthetic conjugated estrogen options, Enjuvia and Cenestin, from our company.
Is the Company’s sales force adequately staffed to appropriately detail Barr’s product pipeline?
Our 250-person Duramed Pharmaceuticals’ Women’s Healthcare Sales Force currently promotes our SEASONALE extended-cycle oral contraceptive product, our Cenestin hormone therapy products and Plan B emergency contraceptive product to female healthcare practitioners.
This sales force will market additional female healthcare products, such as SEASONIQUE and SEASONALE Lo if approved. We also expect that as new female healthcare products are developed, or acquired, we will add them, where appropriate, to the portfolio of products presented by this team.
Our 43-person Duramed Specialty Sales Force promotes our TrexallTM product directly to rheumatologists and dermatologists. As a result of our co-promotion agreement with Kos Pharmaceuticals, Inc., this team also promotes the Niaspan and Advicor cholesterol treatments to obstetricians, gynecologists and other practitioners with a focus on women’s healthcare. Additionally, they will communicate the benefits of extended-cycle contraceptives to this physician audience. We expect to use this sales force to promote additional products as we develop or acquire them.
Supporting proprietary products requires a considerable investment in marketing. Can you discuss the Company’s physician, professional and Direct-to-Consumer (DTC) marketing initiatives?
Our Women’s Healthcare Sales Force details SEASONALE and other female healthcare products directly to more than 40,000 healthcare providers who we have determined are among the most productive prescribers of oral contraceptive products in the United States. SEASONALE is the first extended-cycle oral contraceptive, and with its launch, we created an entirely new product category. As a result, education is a significant component of our detailing activities.
Marketing support includes professional education materials, published data from our clinical studies demonstrating the safety and efficacy of the extended-cycle concept, and product sampling kits that contain extensive information for patients. We reinforce our detailing activities with a trade advertising program in leading medical journals and a DTC advertising campaign.
During fiscal 2005, we executed four key business development initiatives, including the agreements with Kos Pharmaceuticals, PLIVA and Cephalon that I have already discussed. We also completed an agreement with King Pharmaceuticals, Inc. for exclusive rights in the U.S. for Nordette® oral contraceptive and Prefest® hormone therapy.
In addition to these developments, we completed the integration of our 250-person Duramed Pharmaceuticals’ Women’s Healthcare Sales Force, and exercised our option to make a one-time royalty payment of $19 million to Eastern Virginia Medical School (EVMS) related to the SEASONALE extended-cycle oral contraceptive. We also established a $175 million, five-year, senior unsecured revolving credit facility that will be used for working capital, capital expenditures, acquisitions and other general corporate purposes.
All of these activities meet our objectives of providing additional opportunities for long-term growth and expansion of our business.
To help diversify our existing revenue base and to provide for additional long-term opportunities, we initiated a program more than five years ago to develop and market proprietary pharmaceutical products. We formalized this program in 2001 by establishing Duramed Research. Today we have a substantial number of employees dedicated to the development and marketing of our proprietary products including approximately 300 sales representatives that promote directly to physicians four of our products and two products related to the Co-Promotion Agreement with Kos Pharmaceuticals. In addition, we sell but do not actively market seven other proprietary products.
Growth in proprietary product sales over the last three fiscal years has been accomplished through product acquisitions and through higher sales of our first internally developed proprietary product, SEASONALE®.
Sales of our generic oral contraceptive products decreased 2% in fiscal 2005 compared to fiscal 2004. Price declines and lower volumes resulting from additional competitors reduced sales on certain of our products, mainly Apri and Aviane, and a slowdown in the growth rate of generic substitution more than offset (1) full year contributions from products launched during fiscal 2004, (2) two new products launched in fiscal 2005 and (3) market share gains on other existing products.
Oral contraceptives are the most common method of reversible birth control, used by up to 82% of women in the United States at some time during their reproductive years. Oral contraceptives have a long history with widespread use attributed to many factors including efficacy in preventing pregnancy, safety and simplicity in initiation and discontinuation, medical benefits and relatively low incidence of side effects. From fiscal 2002 to fiscal 2004, sales of our generic oral contraceptive products more than quadrupled.
This growth was fueled by new product launches, the addition of new customers and by increasing rates of generic substitution. We currently manufacture and market 22 generic oral contraceptive products under trade names, two of which we launched during the fiscal year ended June 30, 2005. This portfolio now represents nearly all oral contraceptives that are eligible for generics. Additionally, the growth in generic substitution rates for this heavily genericized portfolio of products slowed, even as we continued to gain market share on certain products within the portfolio. We anticipate that these trends will continue in fiscal 2006 as competitors launch new products and as the portfolio continues to experience a slowing of overall growth in generic substitution.
However, despite our expectation that sales of our generic oral contraceptive portfolio will decline in fiscal 2006 versus fiscal 2005, we believe that we are well positioned to maintain market share for many of our products and that our portfolio of oral contraceptives will continue to be a significant component of our revenues in fiscal 2006.
Sales of our proprietary products almost doubled in fiscal 2005 as compared to the prior year. This increase relates primarily to: (1) higher sales of SEASONALE, which totaled $87.2 million for the fiscal year, reflecting higher unit sales in support of prescription growth and higher pricing compared to last year; (2) full year sales of Loestrin/Loestrin Fe and Plan B which we acquired in February 2004 and March 2004, respectively; and (3) sales of Nordette and Prefest, which we acquired in November 2004 and December 2004, respectively.
SEASONALE prescriptions, according to IMS data, topped 800,000 for our fiscal year ended June 30, 2005, a 370% increase over prescriptions in the prior fiscal year.
This increase is a direct result of our significant marketing initiatives, including direct-to-consumer advertising and the detailing efforts by our Women’s Healthcare Sales force.
While we look for growth in fiscal 2006 for SEASONALE prescriptions and sales, we expect much lower growth rates than those achieved in fiscal 2005. We have been active in acquiring proprietary products over the last two fiscal years and the contribution from those products has increased our proprietary revenues substantially over that period. Certain of the products which we have acquired no longer enjoy patent protection and are experiencing declining prescription volumes. As a result, while these products are expected to still generate healthy margins and predictable cash flows, we do not expect them to generate the year-over-year sales growth we experienced in fiscal 2005. In fact, some may show year-over-year decreases in sales. As a result, growth in our proprietary product sales in fiscal 2006 will be mainly dependent on growth in SEASONALE, Cenestin and Plan B, and the launch of ourEnjuvia product during the second half of fiscal 2006.
Cost of Sales Data
The remaining increase in selling, general and administrative expenses for the year ended June 30, 2004 as compared to the prior year period was primarily due to: (1) increased marketing costs for SEASONALE of $28 million; (2) higher costs of $12 million associated with the nearly doubling of our women’s healthcare sales force; (3) $14 million in higher legal costs, primarily related to patent matters, the Solvay arbitration and product liability matters; and (4) $8 million of increased information technology costs, including consulting costs related to the initial phases of designing and implementing our new enterprise resource planning system.
HSCB Bottom line…
If ever any of your audience doubted that women’s health was secondary to shareholder equity this should prove beyond a doubt that women, and now girls represent profit potential to be exploited.
Relentless marketing to medical professionals and impressionable young women was profitable for the BARR share-holders, earnings per common share – basic rose from $1.69 per share in 2003 to $2.08 in 2005. That is a $0.39 per share increase. Projected earnings are looking very good for 2006.
I invite you to roam the site yourself and if you have questions or comments, contact these folks and let them know what you think of their profit strategy.
Barr Pharmaceuticals, Inc.
400 Chestnut Ridge Road
Woodcliff Lake, NJ 07677